San Francisco, California. March 20, 2026. Bottini & Bottini Inc. & Cotchett Pitre & McCarthy LLP announce that a jury returned a unanimous verdict today against Elon Musk in favor of the firms' clients in a securities fraud class action case regarding Musk's buyout of Twitter in 2022. The verdict is estimated to be worth approximately $2.6 billion and represents the largest securities fraud verdict ever obtained in the United States. The trial lasted three weeks and resolved fraud claims asserted under Section 10(b) of the Securities Exchange Act of 1934.
"This historic verdict represents an important victory for investor protection, and safeguards the integrity of the stock market," said Frank A. Bottini of Bottini & Bottini. "The ability of America to remain at the forefront of capital formation depends on the ability of shareholders to seek redress when they have been defrauded."
The jury awarded damages for all persons who sold Twitter stock from May 13, 2022 to October 4, 2022, as well as all persons who sold Twitter call options and purchased Twitter put options.
"The jury's verdict sends a strong message that just because you're a rich and powerful person, you still have to obey the law and no man is above it," said Mark C. Molumphy of Cotchett Pitre & McCarthy LLP.
The jury determined that Musk committed fraud when he issued a statement on May 13, 2022 that the deal was temporarily on hold, as well as a statement on May 17, 2022 that "20% fake/spam accounts, while 4 times what Twitter claims, could be much higher."
"We are extremely grateful to the jury for its service during the lengthy trial," said Aaron Arnzen of Bottini & Bottini. "The jurors were conscientious, attentive, and obviously took their civil duty very seriously in this case. They deliberated for four days before issuing their verdict and reached the right result based on the evidence."
By way of background on the case, by Order dated April 24, 2023, the Hon. Charles Breyer appointed Bottini & Bottini and Cotchett Pitre & McCarthy as Lead Counsel for Plaintiffs and the Class. On June 8, 2023, Plaintiffs filed a First Amended Complaint, a copy of which can be viewed below. Plaintiff's Complaint alleges that, after first agreeing to buy Twitter for $54.20 per share on April 25, 2022, Musk began denigrating Twitter and then trying to renegotiate the deal. Musk’s false statements and tweets have caused Twitter securities to substantially decline in value, resulting in an $8 billion loss of market capitalization. Twitter stock and bondholders who sold their securities while the prices were artificially depressed as a result of the fraud of Mr. Musk have been damaged and have the right to pursue damages against him. The lawsuit alleges that Musk engaged in a series of intentional acts that harmed investors. First, Musk violated securities law by failing to timely disclose his increasing ownership of Twitter. He secretly amassed more than 5% of Twitter shares starting in January 2022 without disclosing it publicly, as he was required to by SEC rules. When Musk eventually got around to it, he purposely left out his intention to join Twitter’s Board or potentially buy the company outright. Musk then issued an ultimatum letter offering to buy Twitter for $54.20 per share or Musk would sell his 9.2% stock in Twitter. On April 25, 2022, Musk and Twitter announced the buyout without all the details or prior misconduct by Musk. Musk pledged his Tesla shares as collateral for $12.5 billion in loans to finance part of the purchase price. Musk also initially sold roughly $8.5 billion of Tesla shares to raise funds for the buyout. But then Tesla shares began a steep decline that did not abate, dropping 37% after the announcement of the buyout, causing Musk to stop selling his shares. Musk is on the hook for billions more to complete this buyout both from his own cash and lenders. Tesla’s policies limit Musk’s ability to pledge his Tesla shares as collateral for personal loans to no more than 25% of the loan value, which threshold was breached as Tesla shares continued to plummet. The lawsuit alleges that Musk came up with a plan to extricate himself from this dilemma by making false public statements about Twitter and the buyout to lower the price of Twitter shares. Musk made a series of these false statements that created leverage for himself to renegotiate or back out of the buyout by purposely casting doubt on whether the Twitter deal would go forward. As alleged in the complaint, on May 13, 2022, just before the market opened, Musk tweeted that the buyout was “temporarily on hold” to manipulate the market. The buyout was not on hold and there is no provision in the contract that allows Musk to unilaterally put the deal on hold. Musk then stated in a series of tweets that the buyout would be contingent on the number of fake accounts on Twitter. His tweets escalated and Musk later tweeted that the deal “cannot go forward” unless Musk was satisfied. Musk had no right to cancel the buyout or conduct an investigation into the number of fake accounts because Musk waived due diligence in the buyout contract. Musk was also well aware that Twitter had a certain amount of “fake accounts” and accounts controlled by “bots.” Musk also issued three separate letters stating that he had terminated the Twitter buyout. The value of Twitter stock declined substantially due to this fraud. But then Musk engaged in an abrupt about face on October 4, 2022, less than two weeks before trial was set to begin in Delaware in a case Twitter had filed to force Musk to go through with the buyout. Musk shocked the market on that date by announcing he was abandoning his meritless prior statements and that he would go through with the buyout on the original terms, including the $54.20 price per share. This unexpected news caused Twitter stock to skyrocket by 22% in one day, thus damaging Twitter stock and bondholders who had sold their securities in the weeks and months prior. According to the lawsuit, Musk’s statements and conduct violated the anti-fraud provisions of the federal securities laws, which prohibit false statements and market manipulation. Specifically, the lawsuit alleges that Musk purposefully manipulated Twitter securities to lower their value. The lawsuit alleges that Musk’s sudden interest in fake accounts was a pretext to back out of the buyout or further lower the $54.20 buyout price. By Order dated December 11, 2023, the Court upheld Plaintiffs' claims under Section 10(b) of the Securities Exchange Act of 1934 against Elon Musk. A copy of the Court's order is contained below. By Order dated August 5, 2024, Judge Breyer denied Elon Musk's Motion for Judgment on the Pleadings. A copy of the August 5, 2024 Order is also contained below.